<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 31, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transaction period from _________ to _________
Commission File Number 0-26032
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
AREA BANCSHARES CORPORATION
PROFIT SHARING/401 (k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
AREA BANCSHARES CORPORATION
(Exact name of registrant as specified in its charter)
230 FREDERICA STREET
OWENSBORO, KY 42301
(Address of principal executive offices)
(270) 926-3232
(Registrant's telephone number)
<PAGE> 2
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Financial Statements and Schedules
December 31, 1998 and 1997
With Independent Auditors' Report Thereon
<PAGE> 3
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits, with Fund Information -
December 31, 1998 and 1997 2
Statements of Changes in Net Assets Available for Benefits, with Fund
Information - Years ended December 31, 1998 and 1997 4
Notes to Financial Statements 6
SCHEDULES
A Line 27a - Schedule of Assets Held for Investment Purposes -
December 31, 1998 10
D Line 27d - Schedule of Reportable Transactions - Year Ended
December 31, 1998 11
</TABLE>
<PAGE> 4
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
INDEPENDENT AUDITORS' REPORT
The Retirement Committee of
Area Bancshares Corporation:
We have audited the accompanying statements of net assets available for
benefits of Area Bancshares Corporation Profit Sharing/401(k) Plan (the
Plan) as of December 31, 1998 and 1997, and the related statements of
changes in net assets available for benefits for the years then ended.
These financial statements are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of Area
Bancshares Corporation Profit Sharing/401(k) Plan as of December 31, 1998
and 1997, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes and reportable transactions are
presented for the purpose of additional analysis and are not a required
part of the basic financial statements, but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974.
These supplemental schedules are the responsibility of the Plan's
management. The fund information in the statements of net assets available
for benefits and the statements of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to
present the net assets available for benefits and changes in net assets
available for benefits of each fund. The supplemental schedules and fund
information have been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.
Louisville, Kentucky \s\ KPMG LLP
June 7, 1999
1
<PAGE> 5
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-----------------------------------------------------------------------------------
FIDELITY FICP AREA SECURITY
TREASURY II BANCSHARES FIRST FEDERATED FEDERATED FIDELITY
MONEY CORPORATION TECHNOLOGIES U.S. INTERMEDIATE PURITAN
MARKET FUND STOCK STOCK GOVT. FUND INCOME FUND FUND
------------ ----------- ------------ ---------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value (note 3):
Cash equivalents $587,250 -- -- -- -- --
Mutual funds -- -- -- 228,157 138,939 902,991
Common stocks -- 3,673,950 451,949 -- -- --
-------- ---------- -------- ------- ------- -------
Total investments 587,250 3,673,950 451,949 228,157 138,939 902,991
Receivables:
Employer contributions receivable 43,952 (6,048) (2,230) 1,275 405 5,340
Accrued income 2,454 6,257 -- 898 725 --
Other receivables 9,610 -- -- -- 1,250 --
-------- ---------- -------- ------- ------- -------
56,016 209 (2,230) 2,173 2,380 5,340
-------- ---------- -------- ------- ------- -------
Total assets 643,266 3,674,159 449,719 230,330 141,319 908,331
Liabilities:
Accrued expenses 332 1,892 232 119 73 469
Payable to participants 46 7,835 -- 142 142 213
-------- ---------- -------- ------- ------- -------
Total liabilities 378 9,727 232 261 215 682
-------- ---------- -------- ------- ------- -------
Net assets available for benefits $642,888 3,664,432 449,487 230,069 141,104 907,649
======== ========== ======== ======= ======= =======
<CAPTION>
PARTICIPANT DIRECTED
------------------------------------------------------------------------
T. ROWE
FIDELITY FIDELITY FIDELITY PRICE
BLUE CHIP VALUE LOW PRICE INTERNATIONAL
FUND FUND STOCK FUND FUND TOTAL
--------- --------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value (note 3):
Cash equivalents -- 1,682,845 -- 310,925 2,581,020
Mutual funds 3,847,661 -- 2,543,697 -- 7,661,445
Common stocks -- -- -- -- 4,125,899
--------- --------- --------- -------- ----------
Total investments 3,847,661 1,682,845 2,543,697 310,925 14,368,364
Receivables:
Employer contributions receivable 38,020 15,595 19,817 2,258 118,384
Accrued income -- -- 25,476 11,751 47,561
Other receivables -- -- -- (1) 10,859
--------- --------- --------- -------- ----------
38,020 15,595 45,293 14,008 176,804
--------- --------- --------- -------- ----------
Total assets 3,885,681 1,698,440 2,588,990 324,933 14,545,168
Liabilities:
Accrued expenses 2,004 876 1,336 167 7,500
Payable to participants 2,364 1,369 1,456 620 14,187
--------- --------- --------- -------- ----------
Total liabilities 4,368 2,245 2,792 787 21,687
--------- --------- --------- -------- ----------
Net assets available for benefits 3,881,313 1,696,195 2,586,198 324,146 14,523,481
========= ========= ========= ======== ==========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 6
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
------------------------------------------------------------------------
FIDELITY FICP AREA
TREASURY II BANCSHARES FEDERATED FEDERATED FIDELITY
MONEY CORPORATION U.S. INTERMEDIATE PURITAN
MARKET FUND STOCK GOVT. FUND INCOME FUND FUND
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value (note 3):
Cash equivalents $ 677,281 -- -- -- --
Common stock -- 677,280 -- -- --
Mutual funds -- -- 137,541 75,152 585,052
--------- --------- --------- -------- ----------
Total investments 677,281 677,280 137,541 75,152 585,052
Cash -- -- -- -- --
Accrued income 3,197 985 629 394 18,574
--------- --------- --------- -------- ----------
Total assets 680,478 678,265 138,170 75,546 603,626
Liabilities:
Accounts payable -- 812 -- -- 95
Accrued expenses 229 1,642 59 49 297
Employer contributions payable 23,312 -- -- -- 128
Payable to participants 2,166 8,710 378 885 1,050
--------- --------- --------- -------- ----------
Total liabilities 25,707 11,164 437 934 1,570
--------- --------- --------- -------- ----------
Net assets available for benefits $ 654,771 667,101 137,733 74,612 602,056
========= ========= ========= ======== ==========
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------------------------------------------------------------
T. ROWE
FIDELITY FIDELITY FIDELITY LOW PRICE
BLUE CHIP VALUE PRICE STOCK INTERNATIONAL
FUND FUND FUND FUND UNALLOCATED TOTAL
----------- ---------- ------------ ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value (note 3):
Cash equivalents -- -- -- -- 243,208 920,489
Common stock -- -- -- -- 2,404,944 3,082,224
Mutual funds 2,082,183 1,524,752 2,533,462 241,922 10,459 7,190,523
--------- --------- --------- ------- --------- ----------
Total investments 2,082,183 1,524,752 2,533,462 241,922 2,658,611 11,193,236
Cash -- -- -- -- 4,564 4,564
Accrued income 37,991 -- 60,470 13,549 5,597 141,386
--------- --------- --------- ------- --------- ----------
Total assets 2,120,174 1,524,752 2,593,932 255,471 2,668,772 11,339,186
Liabilities:
Accounts payable 756 436 756 421 -- 3,276
Accrued expenses 1,117 694 1,077 118 -- 5,282
Employer contributions payable 280 333 161 25 2,259 26,498
Payable to participants 4,027 3,556 4,106 1,732 2,912 29,522
--------- --------- --------- ------- --------- ----------
Total liabilities 6,180 5,019 6,100 2,296 5,171 64,578
--------- --------- --------- ------- --------- ----------
Net assets available for benefits 2,113,994 1,519,733 2,587,832 253,175 2,663,601 11,274,608
========= ========= ========= ======= ========= ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 7
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Statement of Changes in Net Assets Available for Benefits,
with Fund Information
Years ended December 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------------------------------------------------
FIDELITY FICP AREA SECURITY
TREASURY II BANCSHARES FIRST FEDERATED FEDERATED
MONEY CORPORATION TECHNOLOGIES U.S. INTERMEDIATE
MARKET FUND STOCK STOCK GOVT. FUND INCOME FUND
------------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Dividends and interest $ 33,037 20,318 -- 8,366 8,254
Net appreciation (depreciation) -- 252,851 346,785 3,917 1,935
--------- ---------- -------- ------- ---------
33,037 273,169 346,785 12,283 10,189
--------- ---------- -------- ------- ---------
Employee contributions 110,674 422,587 -- 9,659 21,766
Employer contributions (1,514) 166,887 (2,230) 3,750 5,225
--------- ---------- -------- ------- ---------
109,160 589,474 (2,230) 13,409 26,991
--------- ---------- -------- ------- ---------
Total additions 142,197 862,643 344,555 25,692 37,180
--------- ---------- -------- ------- ---------
Deductions from net assets attributed to:
Benefits paid to participants 35,381 270,367 3,471 2,232 6,998
Administrative and other expenses 974 6,977 232 261 243
--------- ---------- -------- ------- ---------
Total deductions before interfund transfers 36,355 277,344 3,703 2,493 7,241
Interfund transfers (117,725) 2,412,032 108,635 69,137 36,553
--------- ---------- -------- ------- ---------
Net increase (decrease) (11,883) 2,997,331 449,487 92,336 66,492
Net assets available for benefits - beginning of year 654,771 667,101 -- 137,733 74,612
--------- ---------- -------- ------- ---------
Net assets available for benefits - end of year $ 642,888 3,664,432 449,487 230,069 141,104
========= ========== ======== ======= ===========
<CAPTION>
PARTICIPANT DIRECTED
--------------------------------------------------------------------------------
T. ROWE
PRICE
FIDELITY FIDELITY FIDELITY FIDELITY LOW INTER-
PURITAN BLUE CHIP VALUE PRICE STOCK NATIONAL
FUND FUND FUND FUND FUND UNALLOCATED TOTAL
-------- --------- ---------- ----------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Dividends and interest 89,203 151,139 237,098 215,771 11,751 -- 774,937
Net appreciation (depreciation) 30,706 758,577 (231,655) (176,427) 34,039 -- 1,020,728
-------- --------- ---------- --------- -------- ---------- ----------
119,909 909,716 5,443 39,344 45,790 -- 1,795,665
-------- --------- ---------- --------- -------- ---------- ----------
Employee contributions 108,328 460,197 186,233 279,301 56,251 -- 1,654,996
Employer contributions 31,995 145,916 63,725 97,233 10,864 -- 521,851
-------- --------- ---------- --------- -------- ---------- ----------
140,323 606,113 249,958 376,534 67,115 -- 2,176,847
-------- --------- ---------- --------- -------- ---------- ----------
Total additions 260,232 1,515,829 255,401 415,878 112,905 -- 3,972,512
-------- ---------- ---------- --------- -------- ---------- ----------
Deductions from net assets attributed to:
Benefits paid to participants 101,558 123,106 51,662 95,441 10,382 -- 700,598
Administrative and other expenses 1,387 5,349 2,823 4,164 631 -- 23,041
-------- --------- ---------- --------- -------- ---------- ----------
Total deductions before interfund transfers 102,945 128,455 54,485 99,605 11,013 -- 723,639
Interfund transfers 148,306 379,945 (24,454) (317,907) (30,921) (2,663,601) --
-------- -------- ---------- --------- -------- ---------- ----------
Net increase (decrease) 305,593 1,767,319 176,462 (1,634) 70,971 (2,663,601) 3,248,873
Net assets available for benefits - beginning
of year 602,056 2,113,994 1,519,733 2,587,832 253,175 (2,663,601) 11,274,608
-------- --------- ---------- --------- -------- ---------- ----------
Net assets available for benefits - end of year 907,649 3,881,313 1,696,195 2,586,198 324,146 -- 14,523,481
======== ========== ========== ========== ======== ========== ==========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 8
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Statement of Changes in Net Assets Available for Benefits, with Fund
Information
Years ended December 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------------------------------------------------
FIDELITY FICP AREA
TREASURY II BANCSHARES FEDERATED FEDERATED FIDELITY FIDELITY
MONEY CORPORATION U.S. INTERMEDIATE PURITAN BLUE CHIP
MARKET FUND STOCK GOVT. FUND INCOME FUND FUND FUND
------------- ----------- ---------- ------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends and interest $ 35,874 1,686 8,247 4,747 49,722 111,876
Net appreciation (depreciation)
in fair value of investments (note 3) -- 114,437 1,690 1,839 59,123 346,743
--------- ------- -------- ------- ------- ---------
35,874 116,123 9,937 6,586 108,845 458,619
--------- ------- -------- ------- ------- ---------
Employee contributions 25,013 13,222 17,486 11,802 66,255 211,694
Employer contributions (227) 8,838 7,295 3,929 23,633 72,025
--------- ------- -------- ------- ------- ---------
24,786 22,060 24,781 15,731 89,888 283,719
--------- ------- -------- ------- ------- ---------
Total additions 60,660 138,183 34,718 22,317 198,733 742,338
--------- ------- -------- ------- ------- ---------
Deductions from net assets attributed to:
Benefits paid to participants 111,913 -- 135 2,246 17,060 133,964
Administrative and other expenses 381 1,765 90 66 675 2,573
--------- ------- -------- ------- ------- ---------
Total deductions before interfund transfers 112,294 1,765 225 2,312 17,735 136,537
--------- ------- -------- ------- ------- ---------
Interfund transfers 87,929 530,683 (54,049) 3,049 (77,030) (98,513)
--------- ------- -------- ------- ------- ---------
Net increase (decrease) 36,295 667,101 (19,556) 23,054 103,968 507,288
Transfer from Cardinal Bancshares, Inc.
401 (k) Savings Plan and Trust Agreement -- -- -- -- -- --
Net assets available for benefits - beginning of year 618,476 -- 157,289 51,558 498,088 1,606,706
--------- ------- -------- ------- ------- ---------
Net assets available for benefits - end of year $ 654,771 667,101 137,733 74,612 602,056 2,113,994
========= ======= ======== ======= ======= =========
<CAPTION>
PARTICIPANT DIRECTED
------------------------------------------------------------------
T. ROWE
FIDELITY FIDELITY LOW PRICE
VALUE PRICE STOCK INTERNATIONAL
FUND FUND FUND UNALLOCATED TOTAL
---------- ------------ ------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends and interest 206,531 184,420 13,536 -- 616,639
Net appreciation (depreciation)
in fair value of investments (note 3) 74,508 375,641 (2,339) -- 971,642
---------- ---------- -------- --------- ----------
281,039 560,061 11,197 -- 1,588,281
---------- ---------- -------- --------- ----------
Employee contributions 166,588 259,001 48,238 -- 819,299
Employer contributions 60,690 93,169 17,456 -- 286,808
---------- ---------- -------- --------- ----------
227,278 352,170 65,694 -- 1,106,107
---------- ---------- -------- --------- ----------
Total additions 508,317 912,231 76,891 -- 2,694,388
---------- ---------- -------- --------- ----------
Deductions from net assets attributed to:
Benefits paid to participants 82,523 249,636 54,194 -- 651,671
Administrative and other expenses 1,653 2,262 172 -- 9,637
---------- ---------- -------- --------- ----------
Total deductions before interfund transfers 84,176 251,898 54,366 -- 661,308
---------- ---------- -------- --------- ----------
Interfund transfers (249,835) (155,531) 13,297 -- --
---------- ---------- -------- --------- ----------
Net increase (decrease) 174,306 504,802 35,822 -- 2,033,080
Transfer from Cardinal Bancshares, Inc.
401 (k) Savings Plan and Trust Agreement -- -- -- 2,663,601 2,663,601
Net assets available for benefits - beginning of year 1,345,427 2,083,030 217,353 -- 6,577,927
---------- ---------- -------- --------- -----------
Net assets available for benefits - end of year 1,519,733 2,587,832 253,175 2,663,601 11,274,608
========== ========== ======== ========= ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 9
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(1) DESCRIPTION OF PLAN
The following brief description of Area Bancshares Corporation (the
Corporation) Profit Sharing/401(k) Plan (the Plan) provides only general
information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
(A) GENERAL
The Plan is a defined contribution plan generally covering all
full-time employees of Area Bancshares Corporation, The Owensboro
National Bank, First City Bank and Trust Company, Bowling Green
Bank and Trust Company, New Farmers National Bank, Southern
Deposit Bank, Citizens Deposit Bank, Alliance Bank, Broadway Bank
and Trust, First and Peoples Bank, HNB Bank, N.A., Jefferson
Banking Company, The Vine Street Trust Company, and Vine Street
Financial, Inc. (the Banks) who have completed one full year of
service and have attained the age of 21. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
(B) CONTRIBUTIONS
Participants may contribute not less than 1% and not more than 15%
of their salary to the Plan and direct their investments between
one or more of nine investment funds, subject to annual
limitations. Participant 401(k) deferrals are matched by the Banks
on the basis of a 50% match on participant deferrals up to 7% of
the participant's salary.
(C) PARTICIPANT ACCOUNTS
Investment earnings are allocated based on each participant's
proportionate share of the fair market value of the appropriate
funds as of the valuation date, decreased by any distributions to
the participant.
The Banks' prior contributions and related earnings, which are
forfeited during the year as a result of employee terminations,
are allocated to eligible participants in the Plan as of each
December 31 valuation date based on the participant's
proportionate share of compensation relative to the compensation
paid to all eligible participants during the Plan year. Effective
with the Plan year beginning January 1, 1995, forfeitures reduce
employer match contributions.
Participants direct their 401(K) and employer match contributions
into designated funds. These funds during the Plan years ended
December 31, 1998 and 1997 were: Fidelity FICP Treasury II Money
Market Fund; Area Bancshares Corporation Stock; Federated U.S.
Government Fund; Federated Intermediate Income Fund; Fidelity
Puritan Fund; Fidelity Blue Chip Fund; Fidelity Value Fund;
Fidelity Low Price Stock Fund; and T. Rowe Price International
Fund.
(D) VESTING
Participants are immediately 100% vested in their contributions
and related earnings. Participates are 100% vested in the Banks'
contributions and related earnings after five years of service.
6
(Continued)
<PAGE> 10
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(E) PAYMENT OF BENEFITS
Upon retirement, termination of service or total and permanent
disability, a participant or his designated beneficiary may elect
to receive all amounts credited to the participant's account plus
the participant's share of the Banks' contributions for the
current fiscal year in a lump-sum, equal installments over a
period not to exceed the life expectancy of the participant or the
joint life expectancy of the participant and participant's spouse,
applied to the purchase of an annuity or paid or applied in any
combination thereof. Upon death, the participant's designated
beneficiary may elect to receive the amount such participant would
have been entitled to receive, had he retired on the date of his
death, in one lump-sum, in equal installments over a period not to
exceed life expectancy, or applied to the purchase of an immediate
life annuity. Any portion of a participant's account relating to
employer contributions to which he is not entitled for any reason
is forfeited upon the participant's incurring a break in service
as defined under the Plan.
(F) PLAN AMENDMENTS
Effective December 31, 1997, the assets of the Cardinal
Bancshares, Inc. 401(k) Savings Plan and Trust Agreement (Cardinal
Plan) were merged with the Plan, due to the merger of the
respective plans' sponsors on September 30, 1997. The assets of
the Cardinal Plan are presented in the accompanying 1997 financial
statements as unallocated. Such assets were allocated during 1998.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INVESTMENTS
(A) BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying financial statements have been prepared on the
accrual basis of accounting and comply with the rules and
regulations prescribed or permitted by the Department of Labor.
(B) INVESTMENTS
Investments are stated at fair value. Quoted market prices are
used to value investments. Purchases and sales of investments are
recorded on a trade-date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date.
(C) USE OF ESTIMATES
Management of the Plan has made a number of estimates and
assumptions relating to the reporting of assets and liabilities
and the disclosure of contingent liabilities to prepare these
financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates.
7
(Continued)
<PAGE> 11
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(3) INVESTMENTS
The Plan's investments are held by a bank-administered trust fund.
Investments held at December 31, 1998 and 1997 are presented below.
Investments that represent 5% or more of the Plan's net assets are
denoted by an asterisk (*).
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Investments at fair value:
Money Market Fund -
Fidelity FICP Treasury II Money Market $ 587,250 677,281
Common stock -
* Area Bancshares Corporation 3,673,950 677,280
Security First Technologies Corporation 451,949 --
Mutual Funds:
Federated U.S. Govt. Fund 228,157 137,541
Federated Intermediate Income Fund 138,939 75,152
* Fidelity Puritan Fund 902,991 585,052
* Fidelity Blue Chip Fund 3,847,661 2,082,183
* Fidelity Low Price Stock Fund 2,543,697 2,533,462
* Fidelity Value Fund 1,682,845 1,524,752
T. Rowe Price International Fund 310,925 241,922
Unallocated:
Vine Street Trust Money Market Fund -- 243,208
Vanguard Short-term Corporate -- 203
Vanguard Index Trust 500 Fund -- 10,256
Area Bancshares Corporation Common Stock -- 2,278,939
Security First Network Bank Common Stock -- 126,005
------------ ------------
$ 14,368,364 11,193,236
============ ============
</TABLE>
During 1998 and 1997, the Plan's investments (including investments
bought and sold, as well as held during the year) appreciated
(depreciated) in value as follows:
<TABLE>
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
Common stock $ 599,636 114,437
Mutual funds 421,092 857,205
------------ -----------
$ 1,020,728 971,642
============ ===========
</TABLE>
8
(Continued)
<PAGE> 12
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(4) TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated January 1, 1996, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (IRC).
A participant has no taxable income as a result of contributions of the
employer or income of the Plan until he or she receives a distribution
or a distribution is made available under the Plan.
(5) PLAN TERMINATION
While the Corporation has not expressed any intent to terminate the Plan
or to discontinue contributions, it is free to do so at any time,
subject to the provisions set forth in ERISA. In the event of
termination or partial termination or upon discontinuance of
contributions, the amounts credited to participants' accounts become
nonforfeitable.
(6) RELATED-PARTY TRANSACTIONS
The Owensboro National Bank, a wholly-owned subsidiary of Area
Bancshares Corporation, is also trustee of the Plan. The trustee
provided management and accounting services and use of property and
equipment to the Plan at no charge during 1998 and 1997. All Plan
investments and the related investment earnings were maintained by the
trustee.
9
<PAGE> 13
SCHEDULE A
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
EIN: 61-0902343
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
IDENTITY OF ISSUE, BORROWER, CURRENT
LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE
- ------------------------------------ ------------------------- ------------- -----------
<S> <C> <C> <C>
Fidelity Investments FICP Treasury II
Money Market Fund $ 587,250 587,250
*Area Bancshares Corporation Common Stock 2,319,873 3,673,950
Security First Technologies Corp. Common Stock 254,024 451,949
Federated Investments U.S. Government Fund 221,682 228,157
Federated Investments Intermediate Income Fund 137,629 138,939
Fidelity Investments Puritan Fund 820,529 902,991
Fidelity Investments Blue Chip Fund 2,757,875 1,682,845
Fidelity Investments Value Fund 1,930,801 3,847,661
Fidelity Investments Low Price Stock Fund 2,341,694 2,543,697
T. Rowe Price International Stock Fund 289,737 310,925
------------- -----------
Total Investments 11,661,094 14,368,364
============= ===========
</TABLE>
*represents a party in-interest.
See accompanying independent auditors' report
10
<PAGE> 14
SCHEDULE D
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
EIN: 61-0902343
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
CURRENT VALUE
OF ASSET ON
PURCHASE COST OF TRANSACTION NET GAIN
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE SELLING PRICE ASSET DATE OR (LOSS)
-------------------------- -------------------- --------- ------------- ----- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Fidelity Investments FICP Treasury II
Money Market Fund (A) $ 3,952,112 -- 3,952,112 3,952,112 --
* Area Bancshares
Corporation Common Stock (A) 905,808 -- 905,808 905,808 --
Fidelity Investments Blue Chip Growth Fund (A) 1,010,071 -- 1,010,071 1,010,071 --
Fidelity Investments Low-Price Stock Fund (A) 400,721 -- 400,721
400,721 --
* Area Bancshares Corporation Common Stock (A) -- 230,905 159,280 230,905 104,375
Fidelity Investments FICP Treasury II
Money Market Fund (A) -- 3,926,375 3,926,375 3,926,375 --
Fidelity Investments Blue Chip Growth Fund (A) -- 192,300 126,530 192,300 65,770
Fidelity Investments Low-Price Stock Fund (A) -- 481,508 317,413 481,508 164,095
=========== ============ =========== ============ =========
</TABLE>
(A) Represents a series of transactions
*Represents a party in-interest
See accompanying independent auditors' report
11
<PAGE> 15
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Area Bancshares Corporation
Profit Sharing/401 (k) Plan
Date: June 28, 1999 By: /s/ Thomas R. Brumley
---------------------------------
Name: Thoms R. Brumley
Title: President and Chief Executive
Officer
Date: June 28, 1999 By: /s/ John A. Ray
---------------------------------
Name: John A. Ray
Title: Executive Vice President and
Chief Operating Officer
Date: June 28, 1999 By: /s/ Patricia C. Drury
---------------------------------
Name: Patricia C. Drury
Title: Vice President, Trust Officer
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Submission Media
- ---------- ------------------------------- ----------------
<S> <C> <C>
Ex 23 Consent of KPMG LLP, Electronic
Independent Public Accountants,
dated June 28, 1999
</TABLE>
<PAGE> 1
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Area Bancshares Corporation:
We consent to incorporation by reference in the Registration Statement No.
333-38037 on Form S-8 pertaining to the Area Bancshares Corporation Profit
Sharing/401(k) Plan of our report dated June 7, 1999, relating to the statements
of net assets available for benefits of Area Bancshares Corporation Profit
Sharing/401(k) Plan as of December 31, 1998 and 1997, and the related statements
of changes in net assets available for benefits for the years then ended, and
all related schedules, which report appears in the December 31, 1998 annual
report on Form 11-K of the Area Bancshares Corporation Profit Sharing/401(k)
Plan.
Louisville, Kentucky \s\ KPMG LLP
June 28, 1999
